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FBI Reveals New Details About The Alleged Honolulu Police Conspiracy

Four years ago, Derek Hahn appeared to be a rising star in the Honolulu Police Department.

In 2013, he was picked by Chief Louis Kealoha to be a leader of the department’s elite Criminal Intelligence Unit. The next year he was named the unit’s acting captain and commander. That was the same year he started a business with Kealoha’s wife, Katherine, a deputy prosecutor.

Now, he’s been arrested and charged by federal prosecutors as a ringleader in a conspiracy of corruption that is swirling around the Kealohas and other CIU officers.

Hahn, who was picked up by federal authorities Wednesday, is just the latest cop arrested in what has been a major years-long investigation by the U.S. Justice Department into public corruption and abuse of power by Hawaii law enforcement agencies.

Earlier this week, two other officers, Minh-Hung “Bobby” Nguyen and Gordon Shiraishi, were charged with felonies for taking part in the alleged frame job and lying to investigators.

Derek Hahn, left, was charged with criminal conspiracy Wednesday in U.S. District Court. He’s seen here with his attorney Birney Bervar.

Cory Lum/Civil Beat

On Wednesday, during Hahn’s initial appearance before U.S. Magistrate Judge Richard Puglisi, Assistant U.S. Attorney Janaki Gandhi described Hahn as one of the key figures in the alleged conspiracy to frame Katherine’s uncle, Gerard Puana, to give the chief and his wife the upper hand in an unfolding legal dispute. At the time, the Kealohas were embroiled in a bitter legal fight with Puana and Katherine’s grandmother over money.

In June 2013, the year Hahn was picked to help lead the CIU, the Kealohas reported that their mailbox was stolen — a federal offense — and they identified Puana as the thief.

Ghandi told the court on Wednesday that Hahn played an important role in what the government describes as a conspiracy.

“The evidence that the United States has is that he called the shots,” Gandhi said of Hahn. “And those shots were (aimed) to frame an innocent man for the mailbox theft.”

Hahn was arrested by the FBI on Wednesday morning. But the charges that were filed against him by the U.S. Attorney’s Office weren’t unsealed until the afternoon.

The criminal complaint against Hahn now provides the clearest picture yet of the alleged framing of Puana by the Kealohas and others in HPD. It also details the close relationships between the many players involved, from Louis and Katherine Kealoha to Hahn and the other members of HPD’s Criminal Intelligence Unit who took part in the alleged conspiracy.

For one thing, the complaints highlights the fact that Hahn and Katherine Kealoha had started a business together, Discount Energy Solutions, in 2014 about a year after the alleged frame job.

The Kealohas were also related to Nguyen, who was married to Katherine Kealoha’s niece and living on their property around the time of the alleged mailbox theft.

Hahn’s attorney, Birney Bervar, told reporters Wednesday that the federal government is reaching in this case. He said much of the evidence of a conspiracy is related to shoddy police work, which is why a lot of the reports and timelines don’t add up.

He also slammed the FBI for arresting Hahn, Nguyen and Shiraishi, describing it as an intimidation tactic.

“My client is not going to be intimidated and we’re going to stick with the truth. And the truth is there was no conspiracy to commit any criminal offense,” Bervar said. “Mistakes and sloppy police work and inaccurate police reports area a daily occurrence in the state courts here in Hawaii. That doesn’t mean there’s a criminal conspiracy.”

Former Police Chief Louis Kealoha retired with a $250,000 severance package after he was notified he was a target of a federal corruption investigation.

Cory Lum/Civil Beat

He added that he fully expects his client to be exonerated at trial.

Hahn, Nguyen and Shiraishi, who has since retired from HPD, were all members of the Criminal Intelligence Unit. So too was Niall Silva, a retired police officer who has agreed to cooperate with federal investigators after pleading guilty to conspiracy charges in December for falsifying police reports and lying on the witness stand during Puana’s criminal trial.

The criminal complaint against Hahn highlights the many ways in which members of the Criminal Intelligence Unit, or CIU as it’s commonly referred, worked to falsify reports, destroy or alter evidence and lie to various federal investigators in an attempt to frame Puana and cover their tracks.

It also accused members of CIU of destroying surveillance footage that showed the purported mailbox theft after Puana’s defense attorney, Alexander Silvert, requested it via a subpoena.

According to the criminal complaint — which refers to Katherine Kealoha as “Co-conspirator No. 1” and Louis Kealoha as “Co-conspirator No. 6” — the FBI discovered that members of CIU had recorded over the original hard drive that had been recovered from the Kealohas’ house on the day of the theft.

Instead of images of the front of CC1 and CC6’s residence (where the mailbox was located), the recording captured the ceiling in the CIU office for six straight days; various CIU technicians were also briefly visible. Based on the date stamp from the CIU ceiling recording, it appears the recording was made within days after G.K.P’s defense attorney secured the subpoena for the original hard drives from CC1 and CC6’s residence in preparation for G.K.P.’s trial.

The complaint also mentions two HPD homicide detectives, Dru Akagi and Greg McCormick, who had been assigned to help investigate the mailbox theft as well as an alleged burglary at the Kealohas residence that supposedly occurred six days later.

That alleged burglary, which involved a smashed taillight on Katherine Kealoha’s car, was described by federal investigators as another attempt to blame Puana for a crime.

In an interview Wednesday, Silvert said the latest criminal complaint should serve as an eye opener for those who might not understand the gravity of the alleged offenses.

Silvert was the first person to uncover evidence of potential wrongdoing by the police department, and his concerns eventually spurred the FBI’s investigation. He believes the motive behind the frame job was to help the Kealoha’s gain the upper hand in a lawsuit Puana and his 98-year-old mother, Florence Puana, had filed against Katherine shortly before the mailbox was stolen.

Katherine Kealoha, left, has said she and her husband, Louis Kealoha, are innocent of any wrongdoing.

Cory Lum/Civil Beat

The Puanas had accused Kealoha of duping them in a reverse mortgage deal and stealing hundreds of thousands of dollars that she then spent on lavish gifts for herself and her police chief husband, including a $25,000 breakfast celebration at the Sheraton Waikiki after he was named HPD’s police chief in 2009.

“This is an abuse of power by the most powerful people in law enforcement,” Silvert told Civil Beat. “That’s what’s at the core of this. It’s not about stealing a mailbox. It’s about using your position of authority to frame an innocent man.”

“And this was on such a massive scale within the police department,” Silvert added. “This isn’t just one rogue officer. This is the top echelon of the police department using their powers to frame an individual. That’s simply outrageous and unacceptable.”

The FBI issued its own written statement Wednesday from Special Agent in Charge Paul Delacourt, who oversees the agency’s Honolulu office, that highlighted the significance of the case, at least from the government’s perspective.

Delacourt said the latest complaint shows the extent that Hahn and others went to interfere not only with Puana’s freedom, but also with the FBI and the federal grand jury investigation into their activities. He also noted that the investigation will continue.

“The FBI is conducting a thorough investigation into allegations of public corruption and will exert every legal effort to ensure those responsible are investigated and prosecuted,” Delacourt said. “In order to restore the public’s trust in its law enforcement, we are required to root out all responsible parties. This investigation is not over and we will continue to follow the facts wherever they lead us.”

The federal grand jury that’s been investigating the Kealohas is scheduled to convene Thursday, which is expected to be its final meeting before its term expires.

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